Today's Contents
Reporter's Notepad:
- Asking an uncomfortable question - and answering it
Just The Facts:
- Zelensky says success of US minerals deal depends on talks with Trump
- EBRD forecasts Ukraine's GDP will grow 5% next year if war ends
- Ukrainian titanium firm Velta in talks with 4 US investors on joint projects, CEO says
- Horizon Capital may create a 'catalyst fund' to invest in Ukrainian companies alongside foreign investors
- Preschool, hospital re-open in Lviv after EIB-backed renovations
Here's What They Think:
- Politico: Why Putin is finally negotiating
- The Hill: What is Trump really thinking with his Ukraine policy?
Sober Second Thought:
- What if many refugees don't return? Chatham House paper mulls a couple dozen ideas, from 'diaspora bonds' to 'refugee councils.'
Dear subscribers,
Some questions are considered taboo, or maybe just "impolite," to ask publicly about Ukraine's plight.
One such question is: What if millions of Ukrainian refugees just decide to stay in their host countries?
It's a question that grows more serious by the day - research shows that, the longer the refugees stay abroad, the less likely they are to want to return to Ukraine.
In our Sober Second Thought section today, we highly condense a research paper by Chatham House Academy Fellow Olga Tokariuk that asks the question, and seeks to answer it with about two dozen suggestions for the government, the host countries, and others.
An in-house item: We are getting much busier at URN Daily and founder Adam Brown is having trouble keeping up with the inflow of suggestions, tips, observations and complaints (none of those so far, luckily).
So, for questions related to daily news, story suggestions, scoops and other newsy matters, please message Valentina Bajic, the hard-working head of our newsroom, at valentina@ukrainerebuildnews.com.
For sponsorships, the URN Guidebooks, the Tips for Investors column and other general matters, email founder Adam Brown at adam.brown@ukrainerebuildnews.com.
Or better yet, email us both and we'll sort it out.
Cheers,
Adam and Valentina
Zelensky says success of US minerals deal depends on talks with Trump
Ukrainian President Volodymyr Zelensky stated on Wednesday that the success of the proposed minerals deal with the US depends on his broader discussions with US President Donald Trump and his commitment to supporting Ukraine.
"This agreement can have a major success or quietly pass by. And I believe that a major success depends on our conversation with President Trump," Zelensky said at a press conference in Kyiv.
Zelensky emphasized the agreement only provides a "framework" that can be "part of future security guarantees," which he hopes to discuss with Trump.
During his first cabinet meeting on Wednesday, Trump stated that he expected the Ukrainian president to visit Washington on Friday to sign a "very big deal."
The US and Ukraine have reportedly agreed on terms of the deal that envisions the establishment of a fund into which Ukraine would contribute 50% of proceeds from the "future monetization" of state-owned mineral resources, including oil and gas, and associated logistics.
The agreement, however, doesn't specify any security guarantees the US would provide to Ukraine, but notes the US supports Ukraine's efforts to obtain security guarantees needed to establish lasting peace," according to a draft text published by multiple media outlets on Wednesday.
EBRD forecasts Ukraine's GDP will grow 5% next year if war ends
The European Bank for Reconstruction and Development (EBRD) estimated that Ukraine's economy would grow by 5% in 2026 if the agreement to end the war with Russia is reached this year.
The EBRD also lowered the forecast for Ukraine's 2025 growth, to 3.5% from 4.7%, citing the destruction of electricity infrastructure in the war.
"Although Ukraine has entered 2025 with its external financing secured for the year, it is facing a slowdown in economic growth and accelerating inflation due to the impact of the war that began with the Russian invasion of February 2022," the EBRD said in its latest Regional Economic Prospects report.
The EBRD noted Ukraine's real GDP growth slowed to 2% in H2 of 2024 from over 5% in H1, with the overall growth for last year estimated at 3%.
Resurgent inflation in the latter half of 2024 was fueled by rising electricity costs, adjustments in regulated utility prices, rapid real wage growth, and currency depreciation against the US dollar.
Ukraine's annual inflation hit 12% in Dec. 2024 and is expected to stay at a similar level through the first half of 2025 before declining to single digits by year-end, according to EBRD.
Ukraine's budget deficit for 2025 is expected to reach 19.4% of GDP and will be fully covered by $38.4 billion in external financing. This includes $13.7 billion from the EU under Ukraine's Facility, $22.0 billion from G7 countries using revenue from frozen Russian assets, and $2.7 billion from the IMF, the report said.
Ukrainian titanium firm Velta in talks with 4 US investors on joint projects, CEO says
Ukrainian titanium company Velta is in discussions with four US investors about possible joint mining and processing projects in Ukraine, CEO and majority shareholder Andriy Brodskyy told Forbes.ua in an interview.
"Americans want to gain direct control or participation in projects, not just be buyers of raw materials," Brodskyy said.
He explained that the US investors would either invest in Velta directly or establish joint ventures with the company to develop new deposits and titanium processing.
Velta is facing numerous challenges due to the war with Russia, but the main issue is a lack of financing, Brodskyy said. He noted that Ukrainian mining businesses need Western investments, but that investors for their part require clear rules and legal guarantees.
The US imports 100% of its titanium sponge, which is used in aircraft parts, weapons, and medical implants. Japan and Saudi Arabia are the main suppliers, but China controls 70% of global titanium sponge production, according to Forbes.ua.
Ukraine has one of the largest titanium reserves in Europe and has a real chance to disrupt the market, Brodskyy commented. Velta exports up to 100% of its products, of which 50% goes to Europe, and the rest to the US, he added.
All Velta assets, including Birzulivske and Likarivske ilmenite ore deposits as well as two R&D centers in Ukraine, are managed under Velta Holdings, US, according to its website.
Horizon Capital may create a 'catalyst fund' to invest in Ukrainian companies alongside foreign investors
Horizon Capital, one of the largest private equity firms in Ukraine, is considering creating a fund that would invest in Ukrainian companies along with large foreign investors who need local expertise, the firm's CEO Lenna Koszarny said in an interview with Interfax-Ukraine.
A large foreign investor "needs a partner because he doesn't know the country, he doesn't have any contacts here," she said. "We have our own capital to invest together with large investors so that they feel comfortable entering the Ukrainian market. I think this is a normal strategy."
Horizon Capital, which has about $1.6 billion in assets under management, was established in 2006 and Koszarny herself has been working in Ukraine for 30 years, she told Interfax-Ukraine.
"Our team knows and understands the Ukrainian market very well," she said. "I think it is very appropriate to think about raising funds for a catalyst fund."
A "catalyst fund" could leverage that expertise to amplify the investments that Horizon Capital itself could make, spurring further progress on the reconstruction of Ukraine.
The strategy appears similar to that planned by BlackRock, McKinsey and JP Morgan in the Ukraine Development Fund they are creating for the Ukrainian government.
That fund aims to raise $500 million and $1 billion of "catalytic capital" as a step toward attracting $2 billion to $4 billion in commercial capital, a BlackRock spokesperson told Ukraine Rebuild Newswire in the early planning stages of the fund.
Preschool, hospital re-open in Lviv after EIB-backed renovations
A preschool and a hospital have reopened in the western region of Lviv after refurbishments funded by the European Investment Bank (EIB).
Lviv's St. Luke's Hospital, a vital emergency and specialized care center, has completed a €940,000 renovation to enhance services for its 50,000 annual patients. As the site of western Ukraine's largest burn unit, it plays a crucial role in treating severe injuries.
Key upgrades, including facade insulation and energy efficiency improvements, strengthen the hospital's resilience while providing a more comfortable environment for patients, including internally displaced persons, the EIB said in a press release on Wednesday.
A €330,000 renovation of Preschool No.7 "Dzvinochok" has made it a more energy-efficient and pleasant learning environment for students, including children displaced by the war, as well as staff. The project improved the building's energy efficiency and lowered energy costs, as per the statement.
In the Lviv region, two facilities have already been renovated, and six are currently under reconstruction as part of the EIB recovery programs, with a total investment of over €15 million. This initiative includes six educational institutions and two medical facilities, the EIB said.
Politico: Why Putin is finally negotiating
Russian President Vladimir Putin is seeking to negotiate an end to the war in Ukraine because Moscow is struggling to finance it, argued Agathe Demarais, a senior policy fellow at the European Council on Foreign Relations (ECFR), in an op-ed piece in Politico.
Russia could run out of the means to finance its budget shortfall and "with domestic banks choking on debt, a sovereign default could well trigger a full-blown financial crisis," the author wrote. "If that happened, the Kremlin would be hard pressed to support its banking sector. The house of cards that the Russian economy has become would quickly start shaking."
The Hill: What is Trump really thinking with his Ukraine policy?
Trump may be trying to cultivate a strategic unpredictability with his stance on Ukraine or he may simply see geopolitics differently than the Europeans, according to an op-ed published in The Hill.
"Europe is a mess — pathetic economic growth, arrests for thoughtcrime, a prolonged immigration crisis and unstable governments. Indeed, a stunning number of Europeans think climate change — not Russian aggression, Chinese expansionism or the threat of nuclear war — is the single most serious problem facing the world. Maybe Trump is worried that a group like that cannot be counted on as long-term partners in 'big picture' geopolitics."
What if many refugees don't return? Chatham House paper mulls a couple dozen ideas, from 'diaspora bonds' to 'refugee councils.'
Ukrainian authorities need to prepare for the possibility that many of the nearly 7 million citizens who fled the country as refugees will remain abroad even after the war ends, says researcher Olga Tokariuk in a new paper published by Chatham House.
To do that, the authorities should look for ways for Ukrainian nationals abroad to participate in the reconstruction effort even if they don't return to their homeland, concludes the paper, titled Ukraine's fight for its people. Tokariuk, an Academy Fellow at Chatham House, offers more than a dozen suggestions.
The paper first outlines the situation of Ukrainian refugees abroad, including details of their destinations, their high average level of education, surveys of their plans for the future, and the impact of human capital flight on the Ukrainian economy, among others.
But the paper goes a step further than much similar research by insisting the government of Ukraine prepare for the possibility that many of them won't return, despite the country's severe labor crunch and widely feared demographic crisis.
"Experience from other post-conflict states suggests that more than half of refugees may not return to their home country if the war continues for several years," Tokariuk wrote. "Ukraine needs to be prepared for a scenario in which, despite all efforts, many of its citizens decide to remain abroad after the war ends."
Experts interviewed for the research suggested a number of ways to deal with such a scenario:
- The creation of online communities, or "refugee councils," which could discuss the involvement of Ukrainian refugees in the reconstruction, modelled on the 1,000 internally displaced persons (IDPs) councils that already exist within Ukraine.
- Encourage the diaspora to channel remittances into reconstruction projects, possibly in their home regions, and the state could issue "Diaspora Bonds" to guarantee those investments.
- Encourage Ukrainians to invest in businesses in Ukraine, possibly jointly with international organizations to gain their trust.
- Strengthening social connections between Ukrainians at home and those abroad through volunteer exchanges, summer camps for children or joint cultural events.
The paper's ultimate recommendations to the Ukrainian government were divided into short-term actions, such as: (highly condensed from the original)
- Government entities should focus on encouraging the return of Ukrainians and on closer cooperation with Ukrainians who remain abroad.
- The government should "show respect for people’s individual choices, be honest about what the Ukrainian state can offer to returnees at this time, and, as far as possible, avoid creating a perception that the government is pressuring Ukrainians to return."
- Those who stay abroad should be given an option to work remotely with Ukrainian public and private entities.
- The quality and speed of consular service provision to Ukrainian citizens should be improved.
- Finalize legislation allowing multiple citizenship.
- Create physical and digital spaces to bring Ukrainian communities at home and abroad together, such as a diaspora/emigration museum in Ukraine and a digital platform to connect global Ukrainians.
- Automatically recognize foreign educational qualifications achieved by Ukrainians abroad.
Medium- and long-term recommendations include:
- Offer grants or loans to entrepreneurs who seek to restart companies in Ukraine, motivating refugees to return.
- Encouraging Ukrainians abroad to contribute via remittances, investments, or joint business projects between Ukrainian companies and companies in their countries of residence.
- Develop financial incentives, such as ‘diaspora bonds’, to attract capital into priority reconstruction projects.
- Maintain continuous communication with Ukrainians abroad to inform them about reforms and positive developments in Ukraine that might encourage their return.
- Give Ukrainians the ability to participate more easily in decision-making in Ukraine.
- Fight corruption, enhance democracy and the rule of law, and continue pursuing integration with the EU.
Short-term recommendations for hose countries include:
- Upskill and reskill Ukrainian refugees in host countries to match Ukraine’s labour market and reconstruction needs.
- Support human capital initiatives via EU programmes, such as the Ukraine Facility.
- Host countries plan to balance the need for the Ukraine to bring its people back with the intentions of the refugees themselves.
- Help displaced Ukrainians work remotely for Ukrainian companies or do business with Ukraine .
- Encourage the movement of Ukrainians between their home and host countries.
Medium- and long-term recommendations for host countries:
- Seek a just peace deal and security guarantees that would "enable the sustainable return of refugees and the rebuilding of Ukraine."
- Support Ukraine's integration into the EU.
- Support cultural and educational initiatives that help Ukrainians abroad maintain ties with Ukraine.
- Offer children abroad the chance to learn the Ukrainian language.
- Provide guarantees for potential Ukrainian ‘diaspora bonds’.
Ukrainian Wind Energy Market Review
Altelaw, a Ukrainian legal services company specialized in energy law, promoted the Ukrainian Wind Energy Market Review 2024, a review published by the Ukrainian Wind Energy Association along with law firm Asters.
The review covers the achievements and challenges of the Ukrainian wind energy sector, key wind energy trends in Europe and the world, legislative changes adopted in 2024 and expected in coming years, and more.
Healthy Reconstruction Materials
The Healthy Materials Lab at Parsons School of Design promoted a March 3 workshop, in New York and online, on how Neo-Eco Ukraine is "turning local, natural, and even some conflict-scarred materials into the foundation for sustainable reconstruction."
From sourcing clay, straw, and rubble to engaging communities in hands-on workshops, this approach isn’t just about buildings - it’s about preserving heritage, reducing waste, and empowering people to rebuild together.
Counselling for Ukrenergo Staff
The European Bank for Reconstruction and Development (EBRD) posted that it signed a €240,000 grant agreement benefitting, psychologically, 9,000 people working for Ukrenergo, the state energy transmission system operator, through the Psychological Resilience Programme.
This initiative will open up timely new counselling and psychological support to Ukrenergo staff in wartime, while delivering training for its managers in mental health first aid and coping techniques," the EBRD said.
Applause for Ukraine Recovery Fund Agreement
Mustafa Nayyem, the former head of Ukraine's State Agency for Restoration, promoted an article applauding a US-Ukraine agreement on establishing the Ukraine Recovery Fund.
"What started as a structure with external control has evolved into a balanced partnership, unlocking strategic opportunities for Ukraine," said Nayyem, now the senior anti-corruption and reconstruction adviser to the UK- and US-backed Promoting Integrity in the Public Sector Activity (Pro-Integrity) program.
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